Saturday, March 23, 2019

Alan Krueger And Happiness

It took awhile for me to remember after his apparent suicide that the late Alan Krueger was the coauthor of what I consider to be the best paper published on happiness economics, "Develpments in the Measurement of Subjective Well-Being," Journal of Economic Perspectives, 2006, 20(1), 2-24, https://www.aeaweb.org/articles?id=10.1257/08953300677 .  (I apologize if that link is no good.)

This paper was coauthored with is Princeton colleague, Nobel-Prize winning psychologist Daniel Kahneman.  What stood out was that this was as well done an empirical study of this difficult topic as I have ever seen, and above all in terms of his professional accomplishments, Krueger's abillity to carry out very well done empirical studies stands above all else, and this paper with Kahneman certainly fits into that category.

Happiness research, or more properly research on "subjective well-being" as their paper titel put it, has been a controversial mess for some time.  The journals I have edited have been major outlets for this research, so I have seen lots of papers on it.  Not only that, but I have seen the referee reports on those papers, and this area of research has somehow attracted a lot of unhappy people taking out their unhappiness on papers that they referee.  This is not true  of all people in this field, and  I shall especially single out Richard  Easterlin, the fathr  of the field, who retired from USC last year at age 92 and deserves a Nobel Prize.  But many others in the field are not as happy as he has always been.

There are three main sources of data for these studies: cross-sectional cross-national, time-series within a naton, and panel studies of individuals over time (hence, also time-series).  I have listed them in increasing order of scientific credibility. Even so, these least credible cross-section studies get lots of media attention. I mean, wow! the UN just released its latest World Happiness Report, and, wow! Finland is Number One, despite having a way-above average suicide rate. But, hey, the suicides are not showing up in the survey.  And wow! the US has continued to decline, now at #19 or thereabouts, which is probably meaningful given that the US is the only high income nation in the world with a declining life  expectancy.

The middle of these, time-seires inside a nation , does not have the cross-cultural problems that the previous method has, but it has the problem that people die over time so the sample is different people at different time periods. In any case, it  was these data sets on Japan and the US that led Dick Easterlin to enunciate his "Easterlin Paradox," (no, he did not name it that), that while a nation with rising real income per capita always showed that at any point in time higher income people were happier than poorer people, over time overall happiness levels did not rise.  Indeed, for the US they have gradually declined, with 1956 being the year of maximum recorded happiness in the US, even though real incomes per capita have risen quite substantially since then.

Which brings us to the final method, the one I take the most serously, panel studies of individuals.  Yes, this is what Kahneman and Krueger did with a set of 500 women in Columbus, Ohio over aa period of time, monitoring almost minute by minute, very closely, the most detailed and credible study of this sort I have seen.  They found that these women preferred being with their friends more than with their husbands or lovers, and those more than their children.  The only people they were less happy being around than being alone with were their bosses, oh, big surprise.  In terms of more specific situations, they most liked "intimate relations," so those spouses and lovers got their due, with their least favorite social situation being stuck in traffic jams, which suggests to me that having people commute with friends is a good idea.

So, there we have it. Alan Krueger was a serious researcher in happiness economics.  It has also come out that in reent years he has also studies effects of the opiod crisis and also mental health issues more broadly. I have not read these more recent papers, but I am confident that he applied the high standards of professional empirical research to these topics that he did to his exceptionally outstanding paper with Daniel Kahneman on happiness.  Pretty obviously now in hindsight that he was concerned with these topics suggets that indeed this interest may have been driven by a deeper personal concern.  Pretty clearly, while he may have coauthored the best paper ever written on happiness, in the end he was not himself all that happy.

RIP, Alan.

Barkley Rosser


Monday, March 18, 2019

A Small Anecdote about Alan Krueger

It was back at the beginning of the 1990s, and I was putting together a panel on NAFTA for the ASSA meetings.  This would be URPE’s big plenary at the event, and, among others, I was able to enlist Cuauhtémoc Cárdenas, a leader of uncommon integrity and seriousness of purpose whose victory in the 1988 Mexican presidential election was overturned through blatant fraud.  I wanted someone of stature to present the case in favor of NAFTA, however, and I thought of Krueger because of his influential paper with Gene Grossman that argued for an “Environmental Kuznets Curve”.  (I discovered later the paper had been financed by the Mexican government.)  I sent a request to him, and he agreed to do it. 

Needless to say, he faced a hostile audience.  He was denounced from the floor, and there was no one in the room to defend him.  I disagreed with him too, but on a human level I admired his willingness to take on this job—one for which he would receive no reward of any sort from his department, university or profession.  I’ve had the experience of making similar requests to bring mainstream panelists to URPE events (something I believe in strongly), and it isn’t an easy sell.  Alan took it all in stride.

I’ve subsequently leaned on him a few times for his opinion about empirical controversies I needed to address for UN-related work, and he was always prompt and helpful, a real mensch.  I’m sorry to see him leave us long before his time.

Boeing and the FAA: Rethinking Regulation

This analysis of Boeing’s catastrophic design failure on the 737 Max confirms speculation from other sources; interestingly, it was prepared even before last week’s crash in Ethiopia.  Engineers can pick apart the technical aspects, beginning with the underlying tradeoff between energy efficiency and stability (why nose elevation and drop was such a problem to begin with), but I’m interested in the political economy dimension.

Under the Obama administration, the FAA chose to delegate critical design oversight to Boeing itself; it too went for “resource efficiency” and time-to-market over safety.  Boeing in turn pressured its engineers to approve a dangerously flawed product.  The article provides detail on the corners that were cut, and they are devastating.  The only upside of FAA regulation seems to be that it now allows Boeing to claim, “the FAA considered the final configuration and operating parameters of MCAS during MAX certification, and concluded that it met all certification and regulatory requirements.”  Ironic, when “FAA” in this case means “we”.

But how should regulation be configured in a situation like this?  Is it enough to say that the agency in question, whether the FAA or some other body, should avoid being captured by those they regulate?  Why would we expect that to work?  Part of the problem is simple corruption, since political appointees and even Obama himself stood to benefit from quid pro quo’s offered by regulated firms like Boeing.  That’s structural and hard to dismantle.  (Whenever the solution is virtue we are in real trouble.)  But another part is that Boeing engineers, having been involved in the design process, familiar with its evolution and cognizant of where the bodies are buried, truly are the most qualified to assess adherence to safety standards.  I have no doubt that, in the weeks and months ahead, we will hear stories of engineers who tried to warn the company about the issues with MAX but were brushed aside or even silenced.  From this standpoint, the issue is not that there aren’t resources for scrutinizing safety, but that those resources are too much under the control of management.

Looked at this way, one avenue for reform is greater worker control.  If engineers had more power on the job, for instance through representation on works councils or the board of directors, top brass might not be able to silence them.  Maybe.  But consider the case of Volkswagen, whose workforce was unionized and represented through both a works council and co-management (Mitbestimmung), and where regional government also had a voice in policy.  In some ways this was the most “socialist” of car companies, and yet it was the epicenter of a pollution scandal that has caused at least an order of magnitude more deaths than Boeing.  Ultimately, if your paycheck comes from the company and you face market pressure from competitors, you have the same incentives the people at the top do.

So, while I favor a much greater say for workers on other grounds, I don’t think it solves the problem of regulatory capture.  Here’s an alternative:

1. Deputize the appropriate professional organization, meaning an organization that represents professionals across all employers is given authority to determine whether standards are being enforced.  (I suspect the standards themselves may still need to be set politically, at least in part, but maybe not.)  In the case of Boeing this would mean an independent association of safety engineers would be entrusted with regulating the safety of aircraft, as well as other types of hazardous equipment like automobiles.  You could envision similar roles for professional bodies in accounting, law, environmental management, occupational safety and health, etc.

2. Require, based on payroll size, assets, sales or some combined metric, a certain number of these professional positions (e.g. safety engineers) to work in the firm but be selected by their association.  These people would be employed by the professional group, paid and promoted by them, and subject to restrictions on quitting and taking jobs with the firms they are supposed to be regulating.  Their incentives would clearly be on the side of maintaining professional standards, not bending them for the benefit of a particular enterprise.

3. The “outside” professionals would, however, be free to work on any project needed by the company, provided they were not systematically excluded from operations critical to regulatory goals.  In a sense, they would be free resources to the firm, valuable to the extent they are not discriminated against.  If they are subject to discrimination, this would be immediately apparent, and their parent organization could intervene to challenge it.  Thus, if a major safety challenge with the MAX has to do with controlling pitch due to engine placement, it would be noticeable if an entire group of safety engineers was sidelined from it.  In other words, companies would be required to utilize external professionals in a nondiscriminatory manner, and this stipulation could be enforced just as any other nondiscrimination rule would be.

4. The work of outside people would be evaluated according to the professional standards of the organization they represent.  This includes high quality work for the company they’ve been detailed to, as well as careful monitoring of company performance according to professional criteria.

From a theoretical standpoint, this sort of system (which of course would need a lot more detail in order to become a formal proposal) should be seen as a step toward the socialization of the corporation.  It is a means for exercising social control, but it does not turn to an expansion of government power.  Instead it uses civil society groups as much as possible—groups that are of society and not just hypothetical representatives of its interests.  And it tries to alter what corporations are and how they function, turning them into better instruments for the achievement of social goals rather than simply setting external boundaries to their behavior.  (Incidentally, this applies no matter what form corporate ownership takes.)

This strategy can be used in many other ways to bring economic considerations together with environmental, social and cultural ones.  What’s needed is a structural approach to putting people and planet on a par with profit, not just flowery mission statements.

Sunday, March 17, 2019

Introductory Econ Textbooks: A Different Take on the Issues

My eyes were drawn to Timothy Taylor’s gloss on Greg Mankiw’s ruminations on the life of an econ textbook author.  As such an animal myself (Microeconomics and Macroeconomics: A Fresh Start), I’ve thought about many of the same questions.  Differently.

Issue #1: How do you teach the introductory economics courses if you have a dissenting perspective?  Mankiw lays out three alternatives, teaching the mainstream and suppressing your own views, teaching minority or fringe views (i.e. your own), or not teaching introductory econ at all.  He says the second option is “pedagogical malpractice”, and Taylor agrees.  I opted for an approach neither of them consider, to present mainstream economics in the third person: this is what that particular group thinks.  Allow for a critical distancing, which is not the same as critique.  I didn’t write “this stuff is garbage”, but “here are the assumptions that conventional economists make that distinguish their approach from others.”  Whenever possible, I point out where other disciplines differ, and while I encourage students to judge for themselves, I don’t pressure them into adopting any one point of view.  This is called critical thinking, and it barely exists in the world of economics textbooks, which proselytize shamelessly.

Issue #2: What should be the role of supply and demand theory and, in particular, the welfare interpretation of it?  Mankiw feels welfare economics gets short shrift in the typical intro econ course and text, while Taylor demurs.  I am mostly on Mankiw’s side here, but from a critical perspective.  I agree entirely that welfarism underlies virtually all applied econ work outside macroeconomics, and it’s important for students to understand what it means.  We just saw a “Nobel” prize awarded to an economist, Bill Nordhaus, whose primary claim to fame is an application of the welfare framework to climate change.  Nearly every economist working on climate issues adopts the same approach.  It would not be an exaggeration, however, to say that the vast majority of climate scientists regard their work as nuts.  Clearly there is a pressing need to present the underpinnings of welfare economics to as wide an audience as possible, so they can understand these disputes.

In my micro text I devoted half of one chapter and all of another to these foundations, which I called the Market Welfare Model.  As I defined it, the model has three conditions, that the supply curve represents the marginal cost to society of the good in question, the demand curve the marginal benefit to society, and that there is a single, stable market-clearing equilibrium.  The half chapter spells out precisely what “social cost” and “social benefit” mean in economics (which is not what they mean in other frameworks), and the full chapter is devoted to working out the logic that goes from these framing concepts to the welfarist conclusion.  A further chapter on market failure takes up the first two conditions, and the final chapter on general equilibrium theory considers the third.  In one sense, this is Mankiw on steroids, but I think he would recoil at the critical distancing with which all this is presented.

Issue #3: Do current economics textbooks cover too many detailed topics?  The argument that one hears not only from Mankiw but also many other authors is that the incentives of the textbook biz bias toward over-inclusion.  Each reviewer has a favored topic and lobbies the publisher to have it included.  The argument is made that it is easier for an instructor to skip the stuff they don’t care about than conjure up what’s missing that they consider indispensable.  The result is a massive tome bristling with highly specialized material of limited interest at the expense of deep treatment of the key ideas.  Taylor mostly agrees.

I do too, but again with a somewhat different take.  First, I’ve come to think that a good introduction to a discipline would present a set of exemplars that would be relatively standard for new learners.  For instance, climate change should be given detailed treatment in every introductory text, micro and macro alike, where the concepts and tools being developed could be given a bit of a workout to see what they mean in real life.  This should not take the form of a just-so story where climate change just happens to validate everything we always thought, but a test of the strengths, weaknesses and limits of a given approach.  I can imagine a number of other potentially canonical examples: the pay-productivity relationship, health care, financial stability—topics of longstanding interest that are complex enough to illuminate multiple questions in economics.  I confess to not having understood that very well when I wrote my micro text, but I had it mostly figured out when I came to macro.

Second, what makes a “specialized” topic germane to introductory treatment in my book (literally) is its relationship to the core assumptions economists make.  Information asymmetry and the strategic perspective of game theory, for example, are often treated as specialized, but for me they are foundational.  I made a point of presenting a prisoner’s dilemma payoff matrix before a supply and demand diagram in the micro text, since to me the distinction between individual and collective rationality is prior to any other treatment of what economists regard as rational behavior.  (So is a discussion of the psychological assumptions economists make about the nature of rationality, as well as their reduction of all social behavior to choice and exchange.)  General equilibrium theory for me is not a special topic at all, a throwaway add-on, but a primary investigation of whether or to what extent the supply-and-demand metaphor works.  On the other hand, I’ve reluctantly come to think that much of what is covered in the treatment of risk actually is specialized.  It’s certainly important—absolutely indispensable in some contexts—but a student can get the gist of what economics is about without wading into the arcana of certainty equivalence.  Just about all of the so-called microfoundations of macro falls into this category as well.

Issue #4: Should textbooks be free?  Mankiw says no, and he bases his argument on the presumption of market efficiency: if existing textbook publishers, who are disciplined by competition, can’t put a book on the market for less that $200 a pop, where could the cost savings come from?  Wouldn’t “price controls”, like a zero price, require a corresponding reduction in quality?  Taylor, who has actually worked on a reduced-cost e-text project, thinks textbook quality is fairly standardized, but not so the ancillary materials like tutorial software, prefab presentations and text banks.  Here is where we would find the downside of cheap.

My perspective is rather distant from theirs.  First, I think economics is definitely not a settled field, nor is economic pedagogy a done deal.  There is plenty of experimentation that needs to be done, and this requires a multiplicity of texts instructors can choose from.  (Austrians should understand this point in their bones.)  The issue is not quality per se, but innovation and rivalry, or at least the opportunity to try out alternative approaches and assess the results.  This is why I am concerned about the movement to standardize textbooks in order to achieve zero cost.  The price is right, but the standardization is not.

Second, the arms race in ancillaries is a reflection of poor pedagogy in economics.  Of all the social sciences, economics gives the least disciplinary attention to teaching strategies.  I haven’t done the quantitative work (has anyone?), but based on my experience, there are fewer sessions at the ASSA meetings devoted to pedagogy than you would find in most other fields.  Economists have been notoriously slow to transition to active learning methods, much less a true critical thinking framework.  This is visible in most of the baroque supplementary material purveyed by textbook publishers, a deadly, mind-numbing hammering of procedures (diagram manipulation) to be inscribed in short-term memory.  Not that it’s all bad, of course.  I transitioned this term to a flipped classroom: I recorded my lectures and posted them online (with short self-graded quizzes to encourage and document attention) in order to maximize class time for workshops and other activities.  In general, however, active learning is less given to prefabricated, standardized aids; it is tailored to the students in front of you, the issues of the moment, and the flow logic of how well various ideas are gelling from week to week.  The best ancillary would be a guidebook for instructors explaining the techniques for crafting small research projects and engaging workshops, along with examples of what has worked in the past.

All that said, zero is still the best price.  I think it’s appropriate for foundations or other funding sources to support a multiplicity of free textbook options.  (I’m not looking at you, Bill Gates.)  INET has done this with its CORE project, but no one else.  I don’t think funding is the whole story, however.  Economics needs to regard pedagogy as one of its central missions.  This is not only a matter of having more panels about it at the national meetings; there needs to be more disciplinary reward for putting one’s time and energy into the development of strategies and materials for the classroom.  This means promotion, prizes and esteem, and it would require a substantial cultural shift.  Where to begin?  I suspect we have a vicious circle that could well become virtuous.  Today we have a bleak landscape of minimal innovation in pedagogy and little institutional recognition for those who do this work.  In a world well-populated with innovative experiments in teaching and learning, it would be natural to reward the most successful or even just provocative projects.  So again the next step seems to belong to the funders.

Saturday, March 16, 2019

Lawrence Ferlinghetti Turns 100 Years Old

On the forthcoming March 24.

This last of the Beat Poets, who founded and still owns both the City Lights bookstore and the associated City Lights press, which legally overcame an effort in 1956 to prevent him from publishing Allen Ginsberg's poem, _Howl_, he is not only alive and well by current reports, and looking forward to his centennial birthday party, but his bookstore on Columbus Avenue in San Francisco as well as his press are also doing well.  Apparently the celebrations will begin a week early on St. Patrick's Day with a massive poetry reading and will go on for over a week, culminating on March 26 with a reconsideration of the 1956 case that led to him publishing _Howl_

His bookstore continues to be outstanding.  I bought s book about whales there for a grandson, and I also bought _Karl Marx's EcoSocialism_, by Kohei Saito, Monthly Review Press, 2017, derived from a PhD dissertation written in German in Frankfurt-am-Main in 2016, although the author came out of Japan and relied heavily on Japanese sources as well as German ones. Particularly interesting are various notes on ecology Marx wrote that were never publlished, and, of course, remain in German.

Many of these unpublished notes involve Marx's views of Justus von Liebig, basically the founder of modern agro-chemistry, with his "Law of the Minimum," ("Eine phosphor, keine Leben"), that the minimum necessary biogeochemical eleement in an ecosystem will limit its biomass producrion.  It is a fundamental principle of ecology, which name was coined by Ernst Haekel, Darwin's champion in Germnay who was at Jena where Marx got his PhD.  Haeckel was a German nationalists whose students and students of students would later become Hitler suppoeters.  Marx admired von Liebig and saw his studies as key to understanding how capitalism could destry nature.  This was tied to Marx identifying nature with wealth as opposed to value, which came from labor.  However, he was also upset with von Liebig because of his support of the reactionary Malthus.  Marx himself presents a mixed history, at times presenting a "brown Marxist" view in his "Promethean belief in the virtues of technology and ability of humans to manage nature wissely, while at others worried about capitalist agriculture destroying the welath of nature. 

Needless to say, in these days where a revival of socialism is being deeply tied to the environmental movement, reconsidering Marx's views on this is important, and it is useful to see these unpublished writings of his discussed and highlighted.  I also note that this followsearlier work byJohn Bellamy Foster, who is now an editor at Monthly Review Press.

Anyway, I wish Ferlinghetti a happy cenrennial birthday.

Barkley Rosser

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Wednesday, March 13, 2019

capital-T Truth

Peter writes:




"I was provoked into thinking about this by a dreadful book review in The Nation: David Bell on Sophia Rosenfeld’s Democracy and Truth.  I haven’t read Rosenfeld, and maybe she’s pretty good, but it’s clear Bell is confused about the very starting point for thinking about the problem.  He talks about “regimes of truth”, which he cribs from Foucault: there is no capital-T truth out there, just different views on it which possess more or less power/authority.  We happen to suffer from elites or at least some portion of them, writes Bell, who have particularly dismal standards regarding what should count as true.  The solution is to replace the bad authorities with good ones, more or less.

The error, which ought to be obvious, is that capital-T truth is irrelevant.  It’s the wrong reference point, and it doesn’t matter that no one really knows (for sure) what it is.  The real question is, what are the standards we hold ourselves to in learning about the world and minimizing error?  For instance, do we honestly engage with those who disagree with us?  Do we maintain a modicum of self-doubt and face up to the evidence that could show us we’re wrong about something?  Do we respect logical consistency?  These standards don’t guarantee we’ll arrive at the Truth, nor even that we’ll know it if we stumble on it by accident.  They do reduce the risk of error, and that’s about all we can ask.  By not centering the discussion on standards for argument and belief, Bell can’t even pose the relevant question."



Hi, Peter. I am not as sanguine as you are about dismissing the idea of capital-T Truth.  Here's why: the claim that we should abide by the standards you list in your second paragraph is a normative claim: "one ought to respect logical consistency. honestly engage etc. etc." It seems to me that these normative claims are capital-t True, and that they must be so to do what you want them to do. I think you need to embrace both ethical and scientific realism to really ward off this "regimes of truth" nonsense - which is fine with me, but seems like something you may not want to do. 

Cheers,

Kevin

The Lordstown Effect

Late last week, Sen. Sherrod Brown (D-OH) announced that he will not run for president in 2020, declaring that he would prefer to stay in the Senate to criticize President Trump and support whomever the Dems nominate against Trump.  He had been hiighly priased by various commentators, including Chris Matthews, and even conservative columnist, George Will, who wrote an entire column in WaPo praising him.  In repeated polling among Daily Kos activists he was running around fifth or sixth at about 5%, with the top 3 being Harris, Warren, and Sanders over 10%, and Brown in with Biden, Klobuchar, and O'Rourke in the mid-single digits range, all the others never exceeding 1% (so much for all the attention paid to Booker and Gilibrand, neither going anywhere).  In short, Brown had potential to be a seious candidate, with a record generally respected by both progressives (despite not signing on for "Medicare-for-all") as well as more moderate Dem types.  Of course, his biggest appeal, symbolized by his "Dignity for Work" slogan, was his clearly strong appeal to the midwestern white working class that was key to Trump's 2016 victory, with this reinforced by Brown's strong reelection victory in Ohio in 2018, even as GOP took the governorship.

With all this going for him, and his having enough support to be in the top tier out of the scads of seriously nobody candidates clamoring to run, why really did he pull out?  I do not know, but I find his "I love the Senate so much" explanation not all that convincing. He took a pretty substantial tour around the country with his clearly appealing Dignity for Work pitch, but somehow he obviously decided it was just not quite enough to warrant the hard reality of running, which certainly is hard.  There  may have been doubts in his family, and nobody can be blamed for simply not wanting to put up with all that is involved in such a serious run.  Being in the Senate is certainlhy a lot easier, not that I think Brown is lazy or scared or any of that.

Beyond whatever personal factors there may be, two factors stick out obvioulsy as possibilities, especially when put together.  One is that he is a white male at a time when there are a lot of women running, as well as several non-white candidates, with Kamala Harris recently topping those DK activist polls, if not the broader ones, where two other whilte males lead, the more senior and better known Biden and Sanders, with Biden apparently definitely getting in.  Brown arguably overlaps with both of them, but he would have a hard time beating either of them in the end, and given that they might well be battling for the lead for those not wanting a woman (or nonwhite) candidate, he may have felt he did not have a good enough chance in the end.

The other may have been a feeling that there is also a strong tilt to a progressive stance he felt he could not fully sign on to, with the "Medicare-for-all" issue the tip of an iceberg, although ironically he has long been viewed as among the most progressive and leftist of Dems in the Senate, if not quite as much so as Sanders or Warren.  He saw Harris bungle while supporting "Medicare-for-all" by declaring this would mean no private health insurance, and her having to walk that back.  Harris looks to be maybe in about the same place as Brown, someone who might appeal to both party wings, but wirh her more willing to pander to the left with a strong likelishood of "moving to the center" if she gets the nomination, a very traditional thing to do, but maybe one Brown just did not want to play.  As someone in the Senate for a longer time, and with him emphaszing his love of being in the Senate, it may be that he is too aware of complications for some of these slogans when one gets around to making them into actual policies, with this also applying to the Green New Deal, which I think he was also unwilling to sign on to (I may be wrong on that one).  He may be too much of a policy wonk a la Hillary Clinton, worrying about getting into policy details that would damage his run for the nomination in a time when a more strongly voiced support of a harder line progressive set of positions seems to be popular.

However, there is one other matter that I think may have played a role in his decision, although pehaps more indirectly, and I think there if so it was probably less important than the two already mentioned.  But it would have been and is there.  I am labeling it the "Lordstown Effect," and it has to do with his more or less unabashed and across the board protectionism.  This is (and was) without doubt a central part of his "Dignity for Work" program and also his appeal to the midwestern white working class, arguably the strongest argument for making him the candidate (and he may well yet end up as the VP candidate for Harris or some other non-white male candidate, with reportedly Clinton having seriously considered him for it in 2016).

The problem is that Trump has now shown us what a mess an aggressively protectionist program is, which weakens Brown's position.  It is not just that one is hurting farmers, who seem to be sticking with Trump anyway despite getting hurt by his policies.  It is that even in the core of the old unionized industrial midwest in Ohio, such an across the board protectionism runs into conttradictions, and it has done so in Ohio itself, where Brown has had to face this, managing to get around it on the ground for now, but I suspect fully aware of the problem.  It is highlighted by the closing of the large auto assembly plant by GM in Lordstown, Ohio.  While there were other factors, a major one according to GM is the steel tariffs Trump has not only put on for the clearly hypocritical reason of "national security," but the fact that after renogiating NAFTA (which Brown proudly voted against and supported renegotiating), Trump did not remove the steel tariffs on Mexico and Canada.  Brown supported and supports the steel tariffs, which help him in Youngstown and other Ohio steel towns (and Youngstown was a place that flipped from supporting Obama in 2012 to Trump in 2016), but those same steel tariffs also hurt the industries that use steel, notably in this case the auto industry, which has many production faciities in Ohio also, with the one (formerly) at Lordstown one of the largest.

As long as it was all just an abstracct possibility, Brown could address a rally with steel and autoworkers and support protectionism for both the steel and auto industries.  But, in the end, when the abstraction became a reality, supporting the steel tariffs hurts the autoworkers.  Somehow, somewhere, I think Brown understands this, and it may be that this Lordstown Effect played into his decision, with him realizing that a full-throated defense of across-the-board protectionism is not going to be the leading issue for a Dem trying to unseat the protectionist Donald Trump.  But, who knows, the eventual Dem candidate may yet want to have him on board as VP candidate to quiety nod in that direction anyway, especially if that candidate does not have obvious appeal to the midwestern white male working class.  We shall see.  But I suspect that awareness of the Lordstown Effect has played a role in Brown's decision not to run right now for president.

Barkley Rosser

Monday, March 11, 2019

Is Russia Becoming A Neo-Socialist NEP Economy?

Probbly not, but there has been some movement in that direction.  The New Economic Policy  (NEP) was the Socviet system in the 1920s after the War Communism period and before Stalin imposed command central planning as well as full state ownership of the means of production, classsic socialism.  The War Communism period was a command economy, but without central planning.  Famine appeared as authorities demanded crops from farmers.

The NEP was a partial move back from War Communism to a mixed economy in which most of the "commanding heights" were nationalized, but smaller businesses were privately owned.  There was basically a makrket economy with agriculture privare and market oriented.

When the USSR ceased to exist, central planning ended in Russia, and there was widespread privatization, even as some sectors remained state owned.  What has happened in recent years has been a mild trend towards renationallizing several large firms in several sectors, or letting a dominant state-owned firm become more dominant compared to privatedly owned ones.  This has happened in the oil and gas sectors shere both Rosneft and Gazprom have been renationalized, with only Lukoil privately owned, now the largest privately owned firm in the economy.  In banking there were over 1000 privately owned banks at one point, but the vast majority have failed and increasingly the sector is dominated by always state-owned Sberbank, with the Gazprom bank also being renationalized when Gazprom was.  The railroads remain state-owned as well as the Telecoms.

It is not clear what proportion of the economy is state owned or state directed, with different sources saying anything between 40 and 70%.  However, agriculture and most smaller businesses are privately owned and there is no central planning, even though the state does direct much of what goes on in the economy.  The system is not precisely the same as the old NEP, but it is not all that far off and it may have become more like it in recent years.  On a just-ended visit to Moscow I heard from someone at the central bank that reported inflation numbers are not precisely accurate as they are set ahead of time by policmakers to fit budget projections, with, in effect, the central bank having to try to make those numbers be true, or at least close enough to get awy with the lie.

Addendum (3/12, 8:15 AM): A way NEP different than now is that was a period of social and cultural liberalism and innovation, with the influence of the church suppressed.  One saw modern literary forms, such as the poetry of Mayakovsky, constructivism in architecture, abstract art as with Kandinsky and Malevich, new names for things, and much more, although it was not a political democracy.  But now, with at least nominal democracy, the churh is increasingly influential, homophopbia and xenophobia are on the rise, and a nationalist and autoritatian themes are on the rise.
Actually, this part, along with the form of state control of the economy in place, more resembles Italy in the 1920s than Russia.

Barkley Rosser


Sunday, March 10, 2019

What’s New About Fake News?

The apparently falling standards for what people are willing to believe in seems to be the topic of the day.  We have immense, well-capitalized media outlets like Fox News just making stuff up, crazy conspiracies on the internet, a refusal to accept scientific expertise on matters, like climate change, where it is as well established as it’s ever been.  What’s up with all this?

I was provoked into thinking about this by a dreadful book review in The Nation: David Bell on Sophia Rosenfeld’s Democracy and Truth.  I haven’t read Rosenfeld, and maybe she’s pretty good, but it’s clear Bell is confused about the very starting point for thinking about the problem.  He talks about “regimes of truth”, which he cribs from Foucault: there is no capital-T truth out there, just different views on it which possess more or less power/authority.  We happen to suffer from elites or at least some portion of them, writes Bell, who have particularly dismal standards regarding what should count as true.  The solution is to replace the bad authorities with good ones, more or less.

The error, which ought to be obvious, is that capital-T truth is irrelevant.  It’s the wrong reference point, and it doesn’t matter that no one really knows (for sure) what it is.  The real question is, what are the standards we hold ourselves to in learning about the world and minimizing error?  For instance, do we honestly engage with those who disagree with us?  Do we maintain a modicum of self-doubt and face up to the evidence that could show us we’re wrong about something?  Do we respect logical consistency?  These standards don’t guarantee we’ll arrive at the Truth, nor even that we’ll know it if we stumble on it by accident.  They do reduce the risk of error, and that’s about all we can ask.  By not centering the discussion on standards for argument and belief, Bell can’t even pose the relevant question.

So what’s distinctive about the current situation?  I don’t think it’s the extent of dishonest and otherwise wildly erroneous argument and pseudo-facticity; there’s been an abundant supply of that over my lifetime (I’m on in years), and from what I’ve read it was abundant long before that.  I can remember being furious at the Walter Cronkites and David Brinkleys of my youth for purveying news that was blatantly false.

Here’s a hypothesis.  What has changed is not the amount of falsehood but the willful disregard for standards of error detection in order to disseminate it.  We live in a world of greatly increased information flows, where a false news report can and will be contradicted within minutes by someone in a position to recognize it, document its falsity and post it on electronic media somewhere.  A higher proportion of the population is college-educated than ever before, and even many reporters can understand budgets, follow basic statistical analysis, and make sense of scientific arguments.  In other words, as standards have risen, standardlessness stands more exposed than it did in the past.  It’s simply more blatant, because it has to be.

Take an example: the Gulf of Tonkin “incident”.  This was, as all sides now agree, a direct, calculated lie.  The administration of Lyndon Johnson wanted a free hand to wage war in Indochina; to get it they fabricated a fake attack by North Vietnam on a US navy ship.  (The actual attack was us against them.)  But it wasn’t transparently false.  There was a tiny trickle of evidence from Hanoi and only much belated information from US sailors.  It was a fog of war thing.  Today, on the other hand, when Trump issues a lie, the counterevidence is in front of our eyes within minutes.  To maintain his lie, Trump has to discard elementary standards of truth-seeking and reveal himself for what he is.  LBJ had the luxury of being able to keep up appearances.

I don’t mean to come across as so cynical as to say there’s no difference.  On the contrary, standards matter enormously.  Both presidents lied, but only one directly and openly flouts the standard that evidence should count.  My claim is that we’ve arrived at a point at which transparent disregard for logic and evidence is the only way to continue lying.

Saturday, March 2, 2019

Visa Restrictions And Intellectual Degradation

I am in New York attending the Eastern Economic Association meetings.  I was in an agent-based modeling session in which two partticipants participated by internet because they were both refused visaas to enter the US.  One was from Turkey, which I think is under strict review by the current administration.  The other, a woman from India, working for an American think tank in Toronto, may have simply been a victim of somebody messing up and being too slow in getting the appropriate application forms in on time.  But I am sure the deal on the Turkish participant was new policy.

Their presentations, on self-organizing hierarchies and cryptocurrency dynamics, mostly got through to us. But even with this high-tech ABM crowd there were problems and glitches and occasional disconnctions.  It should not have been this way.

This is just dumb obvious. You arbitrarily keep smart foreigners out of your country, this will lead to intellectual degradation.

Barkley Rosser

Tuesday, February 26, 2019

Iran's Foreign Minister Is Out

This looks like bad news.  Iran's foreign minister, JMohammed avad Zarif, hass resigned.  Apparently he has previously tried to resign several times, but President Rouhani refused to accept it.  This time Zarif did it very publicly on Instagram, ah, the uses of social media.  Anyway, apparently there is a chance he might still be talked into staying, but probably not.  It seems that he has lost the favor of Supreme Leader Khamenei, and  that effectively somebody lse is handling foreign policy now, almost certainly hardliners, perhaps from the Revolutionary Guards.  The most obvious sign of this is that yesterday Syria's leader, Bashar al-Assad visited Tehran, and Zarif was not at the meeting with other top Iranian leaders.  His reignation came later in the day after the meeting.

We do not know the details, but pretty clearly Zarif is out because of the US withdrawing from the JCPOA nuclear deal and imposing strong economic sanctions that have seriously impacted the Iranian economy, despite all other signatory nations have pledged to support the agreement and offset the sanctions.  But the ability of the US to pressure compainies to withdraw from deaaling with Iran out of the threat of having no access to the US market, as well as pushing some nations to switch from importing oil from Iran, has had its impact.  The upshot has been that all the hardliners in Iran who doubted the wisdom of negotiating the JCPOA that led to Iran giving up most of its potential nuclear weapons capability have come out to sneer and criticize the Rouhani government as a bunch of suckers.  Foreign Minister Zarif was the point man in the negotiations, and so it appears that he is the scapegoat for now for all the trouble Iran is suffering as a result of Trump's actions.

In any case, anybodyin the US who thinks this is a good development is very fooliish.

Addendum: 2/27, 11:00 AM

This morning's Washington Post reports that President Rouhani is refusing to accept Zarif's resignarion.  Not clear how all this will play out.

Barkley Rosser

The Trump Tax Cut and Big Pharma

CEOs of 7 pharmaceutical multinationals addressed the Senate Finance Committee:
Pharma execs offer Senate ideas to lower drug costs – except actually cutting prices. Executives from seven pharmaceutical companies — AbbVie, AstraZeneca, Bristol-Myers Squibb, Johnson & Johnson, Merck, Pfizer and Sanofi — are testifying before the Senate Finance Committee. The pharma executives have a number of ideas to reduce drug prices for patients, except lowering list prices. High drug prices has become a rare bipartisan issue, with lawmakers on both sides of the aisle demanding change.
One of these questions posed to the CEO of Abbvie was how much of the benefit from the 2017 tax cut did his company pass onto consumers. I guess the Senator was expecting an honest answer being “none”. But the actual answer came out that AbbVie did not get much benefit from this reduction of corporate profit tax rates. How could that be? Well – look at its past 10-K filings and you will see that AbbVie has sourced little to none of its massive profits to the U.S. parent. Why would you benefit from a tax rate cut when one is engaged in massive transfer pricing manipulation?!

Saturday, February 23, 2019

Neoliberalism as Structure and Ideology in Higher Education

A few weeks ago I speculated on the structural aspect of neoliberalism at an economy-wide level, the way its characteristic framing of economic decision-making may have emerged from changes in the role of finance in business and the composition of high-end portfolios.  My purpose was to push back against the common tendency to view neoliberalism solely as a philosophy, to be countered by other philosophies.  Today I stumbled across this superb bit of reporting from the Chronicle of Higher Education that implicitly makes the same kind of argument in a different context.  (Hat tip: Naked Capitalism.)

The article describes the massive expansion of non-profit online education that has occurred in recent years, with several institutions approaching 100,000 students each.  Interviews with planners and administrators make it clear that the motivating force is not a philosophical rethinking of what education means or should mean; rather they are responding to the emergence of a market that someone needs to serve—if not them, someone else.  More than 30 million adults in the United States have some college credits under their belt but no degree.  With the labor force increasingly segmented by credentials, many of them are desperate to finish their degrees as quickly as possible.  Since they are trying to make ends meet at low-wage jobs, they want programs that are as convenient and inexpensive as possible: commodity education.  Everything about the new online degree providers is dictated by this situation.

Read the article for yourself.  Here’s what I like about it:

It isn't weighed down by explicit value judgments.  It lets readers do this for themselves.

It presents what we can call a neoliberal turn in higher education not primarily as a change in philosophy or mode of discourse, but as a reflection of changing circumstances.  There's a two-way dance between the economic pressures facing students, their expectations and competences in a world in which the role of consumer has been made more determining and ubiquitous, the shift toward tuition financing, and other economic factors on the one hand, and the cognitive structures those implementing these systems use to justify and assess what they're doing on the other.  If anything, the article foregrounds the arrow going from economic context to cognition, which redresses the balance somewhat (as I see it).

Also implicit is the class nature of what is taking place.  The term “elite” is used to describe traditional educational models, as (alas) it should be.  Those who can afford to center their daily life around attendance at a physical college or university have become a fortunate minority.  (In 2017 the New York Times published a useful tool that allows you to look up the median family income of students at a wide range of schools; at the University of Washington, for instance, the median was $113,000.  The source data were assembled by Opportunity Insights.)  Wealthy families will continue to send their kids to places where they can get immersive, open-ended and potentially transformative experiences; the rest can shop online.

But the lines of demarcation are fuzzy.  Some potential students face a choice between “elite” and commodity education, and this introduces a degree of competition between tradition and online models.  Unless they have an ample supply of paying customers and a hefty endowment, institutions of higher ed will feel the pressure of the online credentialers in curriculum, student expectations, and of course price.  Indeed, they already have.

Competition within the commodity education sector is also fierce, since the product is essentially standardized—a degree certificate—and geographic considerations no longer apply.  Hencing branding, and all the activities that enter into it, becomes crucial.  This is why Arizona State University, according to the article, has trademarked the phrase “universal learner”; it gives them a competitive edge against other outfits not permitted to describe their mission with these words.  Again, the privatization of the intellectual commons is not the product of ideological zeal but everyday economic incentives—incentives that were much weaker in the past but have now been exacerbated by the organization of the commodity education sector.

It should be obvious that a driving force behind this set of developments is the decision to shift from a public to a tuition financing model in public higher ed.  That decision can and should be reversed.  Anyone who cares about the future of education (and culture and democracy and all that stuff) should be fully on board.  At the same time, the process is also propelled by the extraordinary increase in economic inequality.  As long as educational credentials play such a large role in determining the life chances of most people in our society, this consideration will push aside others in how colleges and universities are organized, what curriculum they offer and what they will ask of the students who attend them.

To sum up: the long term prospects for higher education are dim as long as current economic and institutional trends continue.  While intellectual disputation of the rationale for commodity education is a worthwhile enterprise, it won’t have much impact on the ground.  Changing course requires we remove tuition (and other economic barriers) as a filter for who has access to quality education, and that we drastically reduce inequalities in the labor market so students have the luxury of valuing education for more than its sorting function.

The Tsunami of Tstupidity

An edited video of an encounter between Senator Diane Feinstein of California and a group of young campaigners for the Green New Deal is eliciting much outrage and indignation on Twitter. Senator Feinstein's unpardonable offense is that she became impatient with being repeatedly interrupted and made a few sarcastic remarks having to do with her knowledge, experience and authority and their lack of those characteristics.

I don't buy Feinstein's rationale for her policy positions on climate change but that isn't what this post is about. Just in the past month there have been three viral outrage epidemics: the Covington sneering kid standoff, the Jussie Smollett assault/hoax and now the Weinstein virtual stoning. Meanwhile there all these transient trending episodes involving billionaires, celebrities, politicians and pedophiles (not to mention "all of the above").  Then there was the Ilhan Omar trope crisis and the Governor Northam blackface controversy and on and on it goes. Are we having fun yet?

What all this nonsense reminds me of is the Indian Ocean tsunami of December 26, 2004. In those days, I was in a dialogue group that met once a month and at our next session after the tsunami, we shared a common impression of some kind of global convergence. Something that had never happened before. People around the world brought together by the sheer magnitude of the tragedy. The universal sublime.

What happened next will make your jaw hit the floor. Nearly one year after the Indian Ocean tsunami, December 15, 2005 YouTube was officially launched. According to YouTube founder Jawed Karim one of the inspirations for YouTube was... the Indian Ocean Tsunami. The other inspiration was Janet Jackson's Super Bowl "wardrobe malfunction." From the sublime to the ridiculous, indeed.

On July 15, 2006 Twitter was launched publicly and Facebook followed on September 26 of the same year. The "paranoid style" and conspiracy theories have been around for centuries and shock jock and outrage radio for about as long as there has been radio. But it seems as though social media has added a new dimension of dementia. Following up on Roger Stone's posting of a menacing image of Judge Amy Berman Jackson led me to a rabbit hole blog and YouTube channel where some entrepreneur who claims to have invented Facebook spins a conspiracy matrix that makes the late, lamented Lyndon LaRouche sound like David S. Broder.

One may surmise that all of these cockroaches were there all along, we just didn't see them until the social media apps tore off the drywall. On the other hand, before YouTube or Twitter, they didn't have 65,000 "subscribers" or 58.5 million "followers." What may fade into the background amidst the sound and fury of all the idiots' tales is that these social media platforms are businesses. Their business models are founded on the hypothetically exponential growth of scandal-and-spectacle-as-vehicle-for-skip-ads when the actual growth curve is logistic. I suspect we're in the Ponzi phase of the cycle and all this bullshit is about ready to hit the fan.

Netanyahu Sinking

While the wise and up-to-date observers declare the two state solution between Israel and Palestine to be deader than dead, I continue to think that morally it is the best solution for this deeeply difficult problem. However, one leading force in sending this solution into the grave is Binyamin Netanyahu, Israel's prime minister, who is up for reelection very shortly. He has for some time been pushing the situation towards a hard nationalist one state solution, with the current Trump admin supporting his worst impulses. But in the last few dayys as the electiion approaches, Netanyahu has made seriously disturbing moves that promise longer tern injustice and instability.

The first of those is his decision to ally with Otzma Jehudit, a political party descended from the terrorist Kahane group.  Really, the Kahanists have been officially labeled a terrorist group by the US government and in the past have killed lots of people, including in the US.  They are so bad that even AIPAC has criticized Netanyahu for  allying with him in this tight election campaign, although I have no doubt that  if he wins they will be back supporting him big and full time.

The other development that I read on Juan Cole's blog is ptentially far more serious and dangeous.  Within the last few days, supposedly spontaneous Israeli West Bank settler activists have halted Muslims from accessing the al-Aqsa mosque.  This has involved both attacking people trying to get near it as well as illeglly chaining the gate to the area around it.  This has received in the US near zero coverage, but this could lead to World War III (or are we on IV?).

Mallik Salman bin Abdulaziz bin Abdul-Rahman al-Sa'ud, the King of Saudi Arabia, whose most prestigious title is that he is the Protector of the Holy Sites (Mecca and Medina) could claim to be the Caliph of Islam if he controlled as did the Ottoman Sultans all three of the most holy sites of Islam.  His  father, the founder of the modern Kingdom of Saudi Arabia, Abdulaziz (aka "Ibn Saud"), did not claim the Caliphate precisely because while had two of them under his control after he pushed the Hashemites out in 1924, he did not control the third, the al-Aqsa mosque in Jerusalem (al-Quds in Arabic), then controlled by the British, That Netanyahu would allow keeping Muslims from visitng this third most holy site in all Islam threatens world religious war.

I (not alone) have long aruged that the most hotly contest piece of land on this planet is a small square known in English in the US as the "Temple Mount," following Jewish and Christian views of it, while it is known in Arabic as the Haram-es-Sharif, the Holy Place.  The earlist Biblical refeence to this site on its high spot is to when reportedly Abraham visited Jerusalem and had friendly dealings with then High Priest Melchizedek.  His temple was reportedly on a more sensitive spot in that enclosure than the al-Aqsa mosque, the later central site of the Hebrew/Jewish temple, which the Romans destroyed in 70 CE after the locals uprose against their rule. 

The building now on this long revered spot is the Dome of the Rock, not quiite as holy in Islam as the al-Aqsa mosque a few feet away from it, but the most beautiful building in Jerusalem.  Not only does the gorgeous Dome of the Rock (al Aqsa and the Christian Church of the Holy Sepulchre not on this mount but not too far away, are both just ugly by comparison) it on the center of Melchizidek's temple and the old Hebrew/Jewish temple, but in Islam it is where supposedly the Prophet Muhammed ascended into heaven for a major  confab, as well as containing rock formations where the souls of those who die pass before going on to final judgment. Its interior art is fabulously beautiful. I saw it in 1997 when I firsr visited this contested site, then under the official jurisdiction of the late King Hussein of Jordan, although in 2017 when I took my wife, Marina, there non-Muslims were no longer allowed inside the Dome of the Rock, although we were able to wander around its extrerior, taking photos.

But now Netanyahu is allowing settler activists to prevent Muslims from even entering the general site (directly above the Western "Wailing"  Wall of the Jews on the lower west side of the former temple) to even get near either the officially more holy al-Aqsa mosque or its more beautiful neighbor, the Dome of the Rock.  This act is completely unacceptable and threatens serious violence and war.

Barkley Rosser

Wednesday, February 20, 2019

The Black Bill and the Green New Deal

"When we first came to Washington in 1933," FDR Labor Secretary Francis Perkins wrote in her memoir, The Roosevelt I Knew, "the Black bill was already before the Congress. Introduced by Senator Hugo L. Black, it had received support from many parts of the country and from many representatives and senators." 

The Black Bill was the Senate version of the Black-Connery Thirty-Hour Bill. On April 6, 1933, the Senate approved the measure by a vote of 53 to 30. Perkins was scheduled to appear before the House committee holding hearings on the Connery Bill:
Roosevelt had a problem. He was in favor of limiting the hours of labor for humanitarian and possibly for economic reasons and therefore did not want to oppose the bill. At the same time, he did not feel that it was sound to support it vigorously. But the agitation for the bill was strong. Its proponent insisted that it was a vital step toward licking the depression. I said, "Mr. President, we have to take a position. I'll take the position, but I want to be sure that it is in harmony with your principles and policy."
Roosevelt had another problem. The National Association of Manufacturers and the Chamber of Commerce were adamantly opposed to the Thirty-Hour Bill. Perkins offered amendments to the Connery Bill, the American Federation of Labor offered other amendments and business representatives "proposed crippling amendments that would have destroyed the purpose of the measure."

On May 1, the administration withdrew its support for the Connery Bill. Roosevelt had concluded that organized business would not support the recovery program if the Black-Connery Bill were to become law. In its place, the collective bargaining provisions of Section 7(a) and wage, hour and labor standard provisions were added to the National Industrial Recovery Act through, in Leon Keyserling's account, "a series of haphazard accidents reflecting the desire to get rid of  the Black bill and to put something in to satisfy labor."

The Supreme Court ruled the Recovery Act unconstitutional on May 27, 1935. In its place, the "Second New Deal" consisted of a variety of policies, including, most notably, the National Labor Relations Act, the Works Progress Administration and Social Security.

The moral to the story is that "the" New Deal was improvised, it evolved, was not unitary and its original impetus came from a fundamentally different policy proposal that was anathema to the business lobby. The Thirty-Hour Bill was conceived as a solution to a problem that is no longer polite in policy circles to consider as a problem -- "over-production."

I am sympathetic to the intentions and ambition of the Green New Deal resolution proposed by U.S. Representative Alexandria Ocasio-Cortez and Senator Ed Markey. What I find especially compelling is the inclusion of social and economic justice and equality in the program goals. The vision isn't just a proposal for "sustainable" business-as-usual, powered by wind and solar.

The day before Ocasio-Cortez and Markey announced their resolution, Kate Aronoff and co-authors presented a "Five Freedoms" statement of principles for a Green New Deal, modeled on Franklin Roosevelt's Four Freedoms.from 1941. My favorite, of course, is number two: Freedom From Toil:
We can’t escape work altogether, and there’s a lot of work we need to do, immediately and in the long term. But work doesn’t need to rule our lives. 
The great nineteenth-century English socialist William Morris made a distinction between useful work and useless toil: we need the former but should free ourselves from the latter. We can escape the crushing toll of working long hours for low wages to make something that someone else owns. 
At present, there’s a lot of work that’s worse than useless — it’s toil that’s harmful to the people doing it and to the world in which we live. But even useful work should be distributed more widely so that we can all do less of it — and spend more time enjoying its fruits.
I suppose there always has been work that is "worse than useless" -- bullshit jobs and all that. But there is cruel irony in the fact that the ultimate solution to the 1930s problem of over-production was perpetual creation of useless toil through credit, fashion, advertising, and government stimulus and subsidies. The original proposal had been... shorter working time!

Which brings me back to the peregrinations of the FDR New Deal. The 12-year deadline posited by the I.P.C.C. for keeping within the 1.5 degree centigrade limit brings us to the 100th anniversary of Keynes's "Economic Possibilities For Our Grandchildren." Time has run out on his caveat:
But beware! The time for all this is not yet. For at least another hundred years we must pretend to ourselves and to every one that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight.
We have been pretending long enough now for foul to become worse than useless and to convince ourselves that fair really would be foul. It is past time to stop pretending.

Sunday, February 17, 2019

Nonsense on Stilted Language: A Review of Nine Pages of Michelle Murphy’s "The Economization of LIfe"

I’m a professor at Evergreen State College.  This year I assigned a new-ish book I hadn’t yet read to my class, and to my chagrin I discovered it was pseudo-scholarship instead of the real thing; so I wrote the following apologia.

UPDATE: Problems like the ones I identified in Murphy’s book are not simply individual shortcomings.  I addressed my critique to a particular book and author, but it’s clear the problems are more widespread.  Murphy draws on the work of other writers like herself, her manuscript was reviewed by other “scholars”  in her field, and since its publication it has been frequently cited as an authoritative source.  More broadly, Murphy holds a tenured professorship at a well-established university and directs a research institute.  She is held in esteem by her peers.  Thus, pseudo-scholarship of the type I describe should not be considered a rogue, individual failing but a normal attribute of a substantial swath of academia.

To continue the analogy I offer in the review, the social problem posed by “fake news” is not that a particular journalist or blogger made up something, but that a large and well-funded industry exists to provide an ecosystem for the production and circulation of “facts” without concern for their actual facticity.  Similarly the discipline of which Murphy is a part.  Economists should be aware that universities are stocked with professors who believe that economics denies the value of anything excluded from national income accounting and that macroeconomic policy has its roots in colonial domination.  They know these things because the academic books and articles they read say them, citing each other as sources.

You can’t go through life always worrying about what others think of you, but you can’t entirely ignore it either.

Saturday, February 16, 2019

Another Question for the Census

The Trump gang has kicked up a ruckus over its plan to insert a question about citizenship in the 2020 decennial census.  It’s a transparent attempt to reduce the response rate of immigrants, disenfranchising them in reapportionment and government spending formulas, despite the Constitution’s call for an enumeration of “persons”, not citizens.

But why stop at citizenship?  When you think about, there is no government interest greater than its ability to collect taxes, the main obstacle to which is tax avoidance, legal and illegal.  Researchers looking into this problem, not to mention government analysts themselves, struggle in the face of rampant secrecy.

So why not use the census to get a better picture of tax cheating?  Insert just a single question, “Within the past year have you failed to pay your lawful federal, state or local tax obligations?”  Respondents should be reminded that a dishonest answer constitutes a violation of federal law.  The fine is small compared to most tax avoidance, but the last thing most tax scofflaws want is added attention to their financial duplicity.

I can see the confusion when the numbers are tallied in 2021.  “Gee, there are all these big houses, shady streets and golf courses, but according to our data no one actually lives here.”

Thursday, February 14, 2019

Who Is Really A Socialist?

Here are some varieties of "socialism:" command socialism, market socialism, socialist market economy, social democracy, democratic socialism, right wing socialism, utopian socialism, corporate socialism, just plain vanilla socialism.  Here are some people who have claimed to be socialist, some of them selecting one or another of these types, but some just keeping it plain vanilla generic: Kim Jong-Un, Xi Jinping, Stefan Lofven, Nicolas Maduro, Bernie Sanders, Aexandria Ocasio-Cortez (AOC).  Who is really a socialist and can we make any sense of all this?

Among the strictly economic issues involved here, aside from the political ones, there are three that stick out prominently: ownership, allocation, and distribution.  The first may be the most important, or at least the most fundamentally traditionally classical: who owns the means of production? This is bottom line Marx and Engels, and they were unequivocal: socialism is state ownership of the means of production, even though in the "hiigher stage of socialism" generally labeled "pure communism," the statte is supposed to "wither away." Capitalism is private ownership of the means of production, although there are debates over some intermediate collective forms such as worker-owned collectives, something favored by anarchistic and utopian socialism and its offshoots and relatives.

Regarding allocation the issue is command versus market, wiith command in its socialist form coming from the state, although clearly a monopoly capitalist system may involve command coming from the large corporations, with this reaching an extreme form in coeporatism and classical fascism, sometimes called corporate socialism.  Needless to say, it is possible to have state ownership of the means of production, classical socialism, but some degree of markets dominating allocative decisions.

Then we have distribution.  In the Critique of the Gotha Program, Marx said the goal of communism was "from each acording to his ability, to each according to his need."  Emphasizing if not precisely that at least a focus on minimizing poverty and supporting those in need as well as increasing the overall level of income and wealth equality is another element of many forms of socialism.  This focus has been especially strongly emphasized by social democracy and its relatives, although most forms of socialism have at least officially supported this, if not always in practice.

Regarding our list of socialisms, where do they stand on these three, adding in the big political issue of democracy and free rights versus dictatorship, well: command socialism involves as its name suggests both command in terms of allocation combined with state ownership of the means of production, with no clear outcome on distributional view.  Historically permanent command as a system has coincided fully with dictatorship, including when this occurs with capitalism as in fascism, especiallly in its German Nazi form, a nearly pure form of command capitalism. The classic  model of this form was the USSR under Stalin, with its leading current example being the Democratic Peoples' Republic of Korea (DPRK), aka North Korea, which pretty much tells us what kind of socialist Kim Jong-Un is.

Market socialism combines state (or collective) ownership of the means of production with market forces driving allocation decisions.  The old example of this that also had that holdover from utopian socialism of workers' management, was Tito's not-so democratic Yugoslavia, which blew up, although its former provincce of Slovenia eventually was the highest real per capit income of all the former officially socialist nations.  According to Janos Kornai, market socialism, including his home of Hungary, suffered from the problem of the soft budget constraint, although we have seen that in many mostly market capitalist economies with rent seeking powerful corporations.

There is no clear difference between market socislism and the "socialist market economy," but the Peoples' Republic of China (PRC) has gone out of its way to officially label itself this latter term, perhaps due to the collapse of Yugoslavia.  Many, including the late Ronald Coase, claim China is really capitalist, but in fact while there is now much private ownership, state ownership remains very strong, and while there is no longer organized cental planning, command elements remain important, and the ownership situation is very complicated, with many firms having substantial while partial state ownership.  In principle this form could be democtatic, but it is not at all that in Xi's current PRC, which has had a largely successful economic system for the  last four decades, despite high inequality and other problems. In any case, this is the system Xi Jinping is identified with.

Social democracy now is the form that emphasizes distributional equality and support for the poor over the ownership and alllocation elements.  This is now, most dramatically in the Nordic nations, although it has had a weaker version in Germany in the form of the social market economy.  The name "social democracy" comes from the now century and a half old German Social Democratic Party, within which at the end of the 19th century several of these forms debated with each other, although in the end what came out, inspired by the original "revisionist" Eduard Bernstein, was what we now call social democracy, which is indeed politically democratic and supporting an expansive welfare state, while not pushing either  state ownership or command.  Stefan Lofven is the current prime minister of Sweden and also leader of the Social Democratic Party of Sweden.  A welder and union leader, Lofven just managed to get reelected and form another government last month, although his new government is "moving to the center," and while he is certainly a social democrat, he has also described himself as being a "right wing socialist," and Sweden has pulled back somewhat from its strongly social democratic model over the last quarter of a century.

Which brings us to democratic socialism, currently highly faddish in the US given that both Bernie Sanders and AOC have identified themselves as followers of this ideology.  The problem is that of all the others mentioned, this one is the least well defined, and Bernie and AOC themselves seem to disagree.  Thus when pushed Bernie posed Denmark as his model, which is a leading example of social democracy, arguably more so even than Sweden now, although its current prime minister is not a Social Democrat (party) and argues that Denmark is "not socialist" (noting its lack of command state ownership).  But AOC has at times said that democratic socialism is not social democracy, while exactly what it is remaiins not well defined.

One source might be the platform of the Democratic Socialists of America (DSA), which AOC officially belongs to.  This supports a democratic and decentralized form that emphasizes worker control, if not clearly ownership, with this harking to utopian socialism, with an ultimate goal of state or some other form of collective ownership, but not in this document command. AOC herself has now pushed forward the Green New Deal, (GND) which should perhaps be labeled "Green Socialism," yet another form.  I do not wish to get into a discusson in this post of the details of the GND, regarding which there has been some confusion (retracted FAQ versus 14 page Resolution) about which there remain some uncertainties. DSA has at times nodded to the British Labour Party, which after 1945 under Clement Atlee, both nationalized many industries while expanding the social safety net, while avoiding command central planning.  However, the GND seems to avoid nationalizations, while emphasizing a major expansion of rhe social safety net, along with some fairly strong command elements laregely tied to its Green environmental part, arguing that mere market forces will be insufficient to move the US economy off its current fossil fuel base soon enough.

Which brings us to generic socialism and the still not described Nicolas Maduro, President of Venezuela.  He is loudly describing himself a socialist, but what form, if any, is unclear. But his economy is the biggest current economic disaster on the planet, so his ongoing claims of being a socialist are damaging the label, as seen in the eagerness of conservatives to identify socialism with him and denounce people like Bernie and AOC and all the Dem prez candidates signing onto the GND even before they knew what was in it, with this exemplified by Trump ranting loudly on this theme during his SOTU.

Looking closely it seems that indeed Maduro and Chavez before him, who preferred labeling the system "Bolivarianismo" rathet than "socialism," did carry out portions of various of the forms of socialism.  Many firms were narionalized, with currently the number of privately owned firms about half of what there were 20 years ago (when Chavez was elected), although many of those original firms have simply disappeared.  About 20% of farmland was nationalized, mostly large-scale latifundia, supposedly to be turned over to landless peasants.  But much of it has simply come to be uncultivated by anybody. In any case, there remain large portions of the economy privately owned, with still wealthy owners living in gated communities and not suffering.

Perhaps the most damaging of the socialist policies have been scattered efforts at command, not based on any central plan, especially using price control.  In agriculture this has been a complete disaster, especially once hyperinflation hit.  Food production has collapsed, and lack of food has driven 3 million out of the country, with many still behind having lost much weight.  OTOH, the regime is supposedly being green by emphasizing traditonal local crops. But this is not even a joke. Bolivarianismo's main positive was its popular redistribution policy, which increased real incomes in poor areas, especially while Chavez was in power, borrowing from the social democracy model.

The problem here is that all of these things, even many oof them together, have been recently tried in neighboring nations, such as  Bolivia, without simialrly disastrous results. Somehow Venezuela has just completely blown apart, with reportedly 86% of the population now opposed to Maduro and people in the poor neighborhoods of Caracas who were the Chavismo base now out demonstrating in large numbers (and being violently suppressed) after Maduro got reelected in a clearly fraudulent election, with most of his neighbors calling for his removal.

I think two things not related specifically to socialism have played crucial roles here: corruption and hyperinflation.  The most important agent in the Venezuelan economy is the state-owned oil company, which was nationalized long before Chavez came to power.  But he, with Maduro made this worse later, fiirng the competent technocratic managers of that company and replacing them with political cronies, with the outcome being a serious decline in oil production, this in the nation with the world's largest oil reserves.  Which leads to the other problem, massive corruption, with the incompetent cronies at the top of the state-owned oil company the worst.  The other killer item has been the hyperinflation, whose source I do not really know, although Venezuelan tax rates are lower than those in the US.  Certainly part of it is massive budget deficits, and as the MMT people note, they were borrowing from abroad.  I do not fully understand all involved in the hyperinflation, although that is not a standard phenomenon in a full-blown command socialist economy, but the hyperinflation has clearly been the final killer of the economy, collapsing support for Maduro. Apparently about a third of the population still supports "socialism," while many of those people reject Maduro, claiming he has blown what Chavez implemented, which Maduro certainly has.

So, for a summary.  Command socialims a la the DPRK is an awful diasster, famine plus dictatorshiip.  Market socialism/socialist market economy a la China has been good at rapid economic growth and much else, although suffering many ills on the environment and income distribution, not to mention alo being dictatorial.  Social democracy a la Swden and Denmark has done as well as any economic system on the planet and is democractic and free, but has also suffered from various problems.  The "democratic socialsim" of certain American politicians remains poorly defined and is in danger of being tied to the disastrous and vaguer form of "socialism" happening in Venezuela, with the danger for US politics being that conservatives may actually succeed in tying this pooerly defined democratic socialism with the barely socialist disaster in Venezuela.

Personally, I wish that Maduro would stop calling himself a socialist. Then he should also resign and get lost for the good of his people ASAP, although I do not support overdone US efforts by sanctions or possible invasion to bring this about.  Let it be the Venezuelan people who remove him, however.

Barkley Rosser


Wednesday, February 13, 2019

Test Tube Politics: llhan Omar, Anti-Semitism and AIPAC

I don’t think I’ve ever seen a political statement triggering evidence (mixed) about its own truth as dramatically as Ilhan Omar’s quip that pro-Israeli bias in congress is “about the Benjamins, baby”.  It’s as if you wrote a letter criticizing the Post Office and had it returned to you with a USPS message stamped on it.

But let’s dig down one level.  The criticism, partly fair, of Omar is that she bought into (so to speak) the anti-semitic slur that Jewish money constitutes a secret conspiracy against “the people”.  This is the old socialism-of-fools stuff, endlessly recycled by bigots right up until this morning; see the demonization of George Soros, for instance.  Because it exists, people who want to combat bigotry—and this includes progressive politicians—should build a giant moat around it and not go there.  By suggesting that hidden Jewish money had bribed Congress into blind support for Israel, Omar crossed a line.  It’s the same line that George Bush senior crossed with the Willie Horton ad, and that Trump crosses a dozen times every Twitter-soaked evening.  Invoking a bigoted stereotype is a bad thing to do, especially for politicians with giant megaphones.

Yet the very response to Omar’s tweet demonstrated the truth she was stumbling for.  A chorus of political and media honchos of every denomination, religious and political, rose up to denounce her.  They didn’t make fine distinctions and they didn’t welcome a correction; their goal was to punish and silence.  Sweeping accusations were made against Omar’s character, leaving the impression that any criticism of AIPAC, the powerful pro-Israel lobby, was proof of antisemitism.  And this attempt to isolate and politically crush Omar was itself the embodiment of her protest.  This is the power of AIPAC in action, the lobby that can’t be named, the doctrine—the transcendental importance of Israel and the rightness of its religious self-definition—that can’t be questioned.

So the truth content of the original Omar tweet depends on how we explain this onslaught.  If it’s really just about the Benjamins (the hundred dollar bills with Ben Franklin looking back at us), that means she was being trashed, directly or indirectly, for pay.  Politicians joined the mob either to protect their campaign revenue or shield themselves from other politicians defending their own campaign revenue.  How likely is that?  The answer depends on two prior questions: how important is campaign finance in setting the basic contours of US policy, and what proportion of this finance is controlled or strongly influenced by AIPAC?

These are questions for specialists in these areas, not me.  I will go out on a limb, however, and say that the truth lies between the endpoints: some but not all of the bias in the US political system is attributable to the influence of big donors, and AIPAC has a substantial but far less than a complete lock on the flow of political money.  You could compare it to other lobbies, like the NRA (National Rifle Association) and AARP (American Association of Retired Persons), both of which are feared for their ability to alter the balance of funding in competitive political contests.  But neither of these two outfits is immune from attack, while AIPAC is.  Gun control advocates go after the NRA all the time, and, while AARP is not exactly a political lightening rod, the complaint that greedy seniors are stealing money from our children is a popular meme on the Right.  So AIPAC is different.  This difference does not seem to be about money, at least not solely, as important as money is to the system and the groups that try to dominate it.  AIPAC appears to possess a complementary form of power, perhaps rooted in the infrastructure of synagogues and other religious organizations as well as the allegiance of many socially prominent Jews active in secular organizations.  When it marshals this network, you get the sort of response we saw to Omar.

This was a ferocious rebuke of a politician, clearly intended to be career-ending.  It will be interesting to see if she can recover without abandoning her advocacy of Palestinians; I certainly hope so.  The attack on Omar, however, is itself the embodiment of the fear all of her colleagues have to feel, that if they step out of line on Israel they will be crushed.  Catering, intentionally or otherwise, to antisemitic tropes is completely unnecessary: the proof of the pudding is in the attack on it.

Tuesday, February 12, 2019

Lyndon LaRouche Is Dead (but not dead enough)

In lieu of an obituary, I am reposting Politics of Pastiche: "voters... need someone to fire all the political-correct police" from August 2015. See also The Higgins Memo, Anders Breivik and the Lyndon LaRouche Cult and Deep Structures of the Cultural Marxism Myth. And Here’s an Insane Story About Roger Stone, Lyndon LaRouche, Vladimir Putin, and the Queen of England.
"...voters crave the anti-status-quo politician. They want results. They need a fighter. They need someone to fire all the political-correct police." -- Sarah Palin, interview with Donald Trump
Anders Breivik
In the introduction to his "compendium" manifesto, 2083: A European Declaration of Independence, mass-murderer Anders Breivik asked, "What is Political Correctness?" and "How did it all begin?" His answer dwelt on the Frankfurt School, and singled out Herbert Marcuse's Eros and Civilization as especially important.  Breivik's text was copied and pasted almost verbatim from a screed called "Political Correctness: a Short History of an Ideology?" by William S. Lind, "Director of the Center for Cultural Conservatism at the Free Congress Foundation."

In turn, the "cultural Marxism" thesis of Lind's "history" can be traced to a 1992 article, "New Dark Age: Frankfurt School and Political Correctness,"  published in a Lyndon Larouche cult magazine, Fidelio The article's author, Michael J. Minnicino, subsequently disowned his work as "hopelessly deformed by self-censorship and the desire to in some way support Mr. LaRouche's crack-brained world-view."

Along the way, "conservative" Republican stalwarts Ralph de Toledano and Patrick J. Buchanan have recycled those crack-brained conspiracy theories, documented by abundant footnotes that typically lead either to a source who didn't say what they were credited with saying, to some other hack propaganda recycler or to an "authoritative" emigre like Victor Zitta or Lazlo Pasztor relying extensively on official histories published by the Axis-allied Horthy regime. Martin Jay traced the strange trajectory of this propaganda meme in "Dialectic of Counter-Enlightenment: The Frankfurt School as Scapegoat of the Lunatic Fringe."

Roger Kimball
This month saw the publication by Roger Kimball's Encounter Books (an "activity" of the Bradley Foundation) of yet another rehash of the discredited crap, The Devil’s Pleasure Palace: The Cult of Critical Theory and the Subversion of the West, by Michael Walsh. A credulous review of that book in the Washington Free Beacon presents the book's argument, apparently oblivious to its dubious lineage:
In The Devil’s Pleasure Palace: The Cult of Critical Theory and the Subversion of the West, Walsh argues that the current obsession with politically correct speech began with a group of Marxist academics at the Institute for Social Research at Goethe University in Frankfurt, who would come to be known as the Frankfurt School. The scholars, Georg Lukács, Theodor Adorno, Walter Benjamin, Erich Fromm, and Herbert Marcuse, among others, developed a wide-ranging, if often contradictory, critique of the principal tenets of "bourgeois" Western culture—from the centrality of reason and individuality to Christian sexual mores.
As Barkley and I have discussed, the term "politically correct" probably was popularized in the late 1960s and early 1970s by left-wing student activists wary of the self-righteous dogmatism displayed by self-styled Marxist-Leninist political grouplets. But that's not the way the conventional mythology goes.

At the end of December 1982, the Wall Street Journal published an op-ed, "The Shattered Humanities" by William Bennett, who at the time was chairman of the National Endowment for the Humanities. Bennett's complaint was that "matters of enduring importance" -- "the true," "the good" and "the noble" -- had been abandoned because "we have yielded to the bullying of those fascinated with the merely contemporary." By the early 1990s, Bennett's lament about the decline of traditional values in the humanities had swelled into a moral panic about the alleged tyranny of political correctness on campus, fueled by best-selling books such as Allan Bloom's Closing of the American Mind, Roger Kimball's Tenured Radicals: How Politics has Corrupted Our Higher Education and Dinesh D'Souza's Illiberal Education: The politics of race and sex on campus. 

Even President Bush I had to get into the act with a commencement address at the University of Michigan at Ann Arbor in which he railed against "political extremists [who] roam the land, abusing the privilege of free speech, setting citizens against one another on the basis of their class or race."
Ironically, on the 200th anniversary of our Bill of Rights, we find free speech under assault throughout the United States, including on some college campuses. The notion of political correctness has ignited controversy across the land. And although the movement arises from the laudable desire to sweep away the debris of racism and sexism and hatred, it replaces old prejudice with new ones. It declares certain topics off-limits, certain expression off-limits, even certain gestures off-limits. 
Isolated anecdotes and broad generalizations can only get you so far. The elusive scourge of political correctness needed to be explained by theory of its origins. Thus the Minnicino/Larouche conspiracy theory, taken up by Lind, Buchanan, de Toledano, Breivik and now Walsh.

In spite of being called out more than two decades ago by a President of the United States, those political extremists liberals on the left have allegedly persevered in their "unrelenting demands... for increasingly preposterous levels of political correctness over the past decade." This, according to S. E. Cupp explains Donald Trumps popularity: "Trump survives -- nay, thrives! -- because he is seen as the antidote, bravely and unimpeachably standing athwart political correctness."


Meanwhile, "A new Rasmussen Reports national telephone survey finds that 71% of American Adults think political correctness is a problem in America today, while only 18% disagree. Ten percent (10%) are undecided."
National Survey of 1,000 American Adults
Conducted August 25-26, 2015
By Rasmussen Reports 
1* Do Americans have true freedom of speech today, or do they have to be careful not to say something politically incorrect to avoid getting in trouble?

2* Is political correctness a problem in America today?
Hey, if they keep repeating it, it must be true, right?

Three Stooges: Lyndon Larouche, Roger Kimball, Anders Breivik